Financial Crime World

Financial Inclusion Anti-Fraud Measures in Kyrgyzstan: A Review of the Country’s Compliance with FATF Recommendations

Kyrgyzstan, a Central Asian country, has made significant strides in implementing anti-money laundering and combating the financing of terrorism (AML/CFT) measures. According to its Mutual Evaluation Report 2018, which assesses the country’s compliance with the Financial Action Task Force (FATF) recommendations, Kyrgyzstan has achieved moderate success in implementing technical requirements.

Compliance Status

Ratings indicate that Kyrgyzstan is largely compliant in several areas, including:

  • Assessing risk and applying a risk-based approach
  • National cooperation and coordination
  • Powers of supervisors

However, the country lags behind in implementing measures to combat terrorist financing, confiscation and provisional measures, and transparency and beneficial ownership of legal persons.

Partial Compliance

Kyrgyzstan’s rating also shows that it is partially compliant in areas such as:

  • Targeted financial sanctions related to terrorism and terrorist financing
  • Correspondent banking
  • New technologies

The country has not fully implemented measures to regulate and supervise non-profit organizations and DNFBPs (designated non-financial businesses and professions), although it has made significant progress in this area.

Non-Compliance

In contrast, Kyrgyzstan is non-compliant with several FATF recommendations, including:

  • Customer due diligence
  • Record-keeping
  • Reporting of suspicious transactions

The country’s rating also indicates that it requires improvement in areas such as:

  • Transparency and beneficial ownership of legal arrangements
  • Regulation and supervision of financial institutions
  • Financial intelligence units

Progress Made

The report highlights that Kyrgyzstan has made significant efforts to strengthen its AML/CFT framework since 2018, including the establishment of a national coordination body and the implementation of new regulations. However, more work is needed to address remaining gaps and bring the country in line with international standards.

Importance of Financial Inclusion and Anti-Fraud Measures

Financial inclusion and anti-fraud measures are crucial for Kyrgyzstan’s economic development, as they help to prevent illicit financial activities and promote trust in the financial system. The government’s commitment to implementing FATF recommendations will be critical in achieving this goal.

In conclusion, while Kyrgyzstan has made progress in implementing AML/CFT measures, there is still more work to be done to achieve full compliance with international standards. The country’s commitment to strengthening its AML/CFT framework will be essential for promoting financial inclusion and preventing illicit financial activities.